NC Auto Insurance Requirements: Uninsured and Underinsured Motorist Coverage

North Carolina law requires all vehicles with a valid North Carolina registration to have continuous liability insurance.  However, according to the most recent data, the Insurance Information Institute shows that 13% of motorists are uninsured.  That means nearly 1 in 8 drivers do not have any insurance coverage at all. Perhaps for this reason, North Carolina also requires drivers to carry uninsured motorist coverage.

But even if the other driver is insured, you are still at financial risk if the costs exceed their insurance coverage amount. For added personal coverage, many drivers choose to add underinsured motorist coverage to their auto insurance policies. It is important to understand what NC auto insurance requirements are, what they actually cover, and how uninsured/underinsured policies can protect you.

What Are North Carolina’s Auto Insurance Requirements?

North Carolina law requires 30/60/25 liability limits for auto insurance. These split limits for liability are $30,000 for maximum bodily injury, $60,000 for total bodily injury from an accident, and $25,000 for maximum property damage. North Carolina also requires coverage for uninsured motorists.

​NC Required Auto Insurance Coverage	​Coverage Amount
​Bodily injury (one person)	$30,000
​Bodily injury (two or more people)	​$60,000
​Property damage	​$25,000
Uninsured	Equal to highest limits of bodily injury liability coverage

(G.S. 20-279.21 NC “Motor Vehicle Liability Policy” defined.)

Maximum Bodily Injury Liability

The maximum bodily insurance is the maximum amount the insurance carrier will pay to a single person injured in an accident in which their insured is at fault. If the amount of damages exceeds the covered amount, there is often no further recovery available.

For example, if the at fault driver carries North Carolina’s minimum coverage of $30,000, but the injured party’s claim is reasonably valued at $40,000, there is a $10,000 shortfall that often goes unpaid.  This can leave the injured person on the hook for things like medical bills that exceed the $30,000.  In other words, without enough insurance to fully pay the claim, the person hurt through no fault of their own is stuck with mounting medical bills, lost wages and nothing for pain and suffering.

Total Bodily Injury Liability

Also known as aggregate liability, this is the maximum amount an insurance policy will pay for all parties injured in a single accident.  If 3 people are all seriously injured, the insurance company will only pay them out of the $60,000 total.  An accident with multiple injured parties may leave one or more of the injured persons without reasonable or sufficient compensation.

Maximum Property Damage

The maximum property damage is the maximum amount an insurance policy will cover for a third party’s property damage. Property damage is not limited to the other party’s vehicle and could also include things like personal belongings that were damaged during the accident.

Uninsured Motorist

Uninsured motorist (UM) coverage is meant to protect you if you are in an accident caused by a driver who does not have liability insurance. UM policies may also cover hit-and-run accidents. North Carolina requires the UM coverage to equal the highest limits of bodily injury liability coverage. Therefore, if you carry $30,000 bodily injury liability, then you must also carry $30,000 in uninsured motorist coverage.

Underinsured Motorist

North Carolina does not require all drivers to carry underinsured motorist (UIM) coverage, but many choose to anyway and it is highly recommended you carry as much UIM coverage as you can afford. UIM policies provide you with bodily injury protection if the at-fault driver’s insurance policy is insufficient to fully and fairly compensate for you injuries, harms and damages. Usually, the UIM coverage will be equal to the highest limits of your bodily injury liability coverage. The way it works, for example, is if the at fault driver has $30,000 in insurance and agrees to pay that to the injured party, but the $30,000 is insufficient, the injured party can then make a claim against their own insurance company under the UIM coverage.  The UIM carrier gets a credit for any amount paid/tendered by the liability carrier.  So, if $30,000 is paid by the at fault driver and the injured party has $100,000 in UIM coverage, there is an additional $70,000 ($100,000 – $30,000 = $70,000) available in UIM coverage.  Keep in mind the injured party’s own insurance company will fight just as hard as the at fault driver’s insurance company to keep from paying out, even thought they are fighting their own insured.

Should I Only Carry the Minimum Auto Insurance Required by NC Law?

North Carolina may only require 30/60/25 liability insurance, but it is recommended to carry more. Having higher liability insurance can help protect you from being personally liable for huge financial burdens for medical expenses and other damages to another driver. As mentioned before, if your insurance does not cover the driver’s damages, your personal assets may be exposed and at risk.

Should I Get Underinsured Motorist Coverage?

For the same reason you should get more liability insurance, you should also get underinsured motorist coverage. If the at-fault driver’s insurance does not cover your medical expenses or damages, UIM coverage can cover the remaining balance. It is recommended you carry as much UIM coverage as you can reasonably afford.

Will My Insurance Premiums Increase If I Use My UIM Coverage?

Filing a UIM claim should not affect your insurance premium. Insurance premiums are not supposed to increase if the accident is caused by another driver (i.e. not your fault).

North Carolina Auto Insurance Requirements vs. Recommended Coverage

While insurance premiums can be high, they often pale in comparison to costs resulting from car accidents. Medical bills, vehicle repairs, and a lifetime of pain or injury can quickly add up to tens of thousands, if not hundreds of thousands of dollars. North Carolina does require a certain amount of auto insurance coverage, but all drivers should seriously consider getting more insurance than the law mandates. Whether you or the other driver are at fault, you want to be covered.

If you have been in an vehicle accident in WNC with an uninsured or underinsured driver, Fisher Stark P.A.  can help. Call us today for a free consultation to discuss your case and what your options may be.